Tags: oil | falls | us | supply | glut

Oil Falls From Seven-Week High as US Supply Seen Swelling Glut

Wednesday, 18 Feb 2015 08:46 AM

Oil declined from its highest closing price in seven weeks in New York on estimates that U.S. crude inventories advanced from a record level last week.

West Texas Intermediate futures dropped as much as 2.3 percent, reversing yesterday’s 1.4 percent gain. Stockpiles probably climbed by 3 million barrels through Feb. 13, according to a Bloomberg News survey of analysts before an Energy Information Administration report on Thursday. Supplies increased in the prior five weeks to 417.9 million, the highest in records dating back to August 1982.

U.S. oil production remains at its highest in at least three decades even as companies idle a record number of oil rigs in response to last year’s 46 percent plunge in prices. While WTI has rebounded 19 percent from this year’s low, the gains will dissipate as U.S. output continues to expand, according to UBS Group AG, Bank of America Corp. and Commerzbank AG.

“There’s a price correction after some huge upward moves yesterday,” Amrita Sen, chief oil analyst at researcher Energy Aspects Ltd., said by e-mail from London. “In the short term, U.S. tight oil output may continue to rise because even though the rig count is decreasing, companies are moving rigs from unprofitable plays to the core.”

WTI Move

West Texas Intermediate for March delivery declined as much as $1.25 to $52.28 a barrel in electronic trading on the New York Mercantile Exchange and was at $52.36 at 1:20 p.m. London time. The contract closed at $53.53 on Tuesday, up 75 cents from Friday at the highest settlement since Dec. 30.

Brent for April settlement fell $1.43 to $61.10 a barrel on the London-based ICE Futures Europe exchange. It advanced $1.13 to $62.53 on Tuesday. The European benchmark crude traded at a premium of $8.02 to WTI for the same month.

U.S. crude production climbed to 9.23 million barrels a day through Feb. 6, the most in weekly data compiled by the Energy Department’s statistical arm since January 1983.

United Steelworkers members who help run oil terminals at a California port are threatening to join an oil-workers’ strike as they negotiate their own labor contract with Tesoro Logistics LP. Since Feb. 1, the union has walked out of nine plants that account for 13 percent of the country’s fuel capacity.


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Oil declined from its highest closing price in seven weeks in New York on estimates that U.S. crude inventories advanced from a record level last week. West Texas Intermediate futures dropped as much as 2.3 percent, reversing yesterday's 1.4 percent gain. Stockpiles...
oil, falls, us, supply, glut
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2015-46-18
Wednesday, 18 Feb 2015 08:46 AM
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